. . . Or, if I take a piece of leather and work it up into a
pair of shoes, the shoes are my wages--the reward of my
exertion. Surely they are not drawn from capital--either
my capital or anybody else's capital--but are brought
into existence by the labour of which they became the
wages; and, in obtaining this pair of shoes as the wages
of my labour, capital is not even momentarily lessened
one iota. For if we call in the idea of capital, my
capital at the beginning consists of the piece of
leather, the thread, &c. (p. 34).
It takes away one's breath to have such a concatenation of fallacies
administered in the space of half a paragraph. It does not seem to
have occurred to our economical reformer to imagine whence his
"capital at the beginning," the "leather, thread, &c." came. I venture
to suppose that leather to have been originally cattle-skin; and since
calves and oxen are not flayed alive, the existence of the leather
implies the lessening of that form of capital by a very considerable
iota. It is, therefore, as sure as anything can be that, in the long
run, the shoes are drawn from that which is capital par excellence; to
wit, cattle. It is further beyond doubt that the operation of tanning
must involve loss of capital in the shape of bark, to say nothing of
other losses; and that the use of the awls and knives of the shoemaker
involves loss of capital in the shape of the store of [179] iron;
further, the shoemaker has been enabled to do his work not only by the
vital capital expended during the time occupied in making the pair of
shoes, but by that expended from the time of his birth, up to the time
that he earned wages that would keep him alive.
"Progress and Poverty" continues:--
. . . As my labour goes on, value is steadily added until,
when my labour results in the finished shoes, I have my
capital plus the difference in value between the
material and the shoes. In obtaining this additional
value--my wages--how is capital, at any time, drawn
upon? (p, 34).
In return we may inquire, how can any one propound such a question?
Capital is drawn upon all the time. Not only when the shoes are
commenced, but while they are being made, and until they are either
used by the shoemaker himself or are purchased by somebody else; that
is, exchanged for a portion of another man's capital. In fact
(supposing that the shoemaker does not want shoes himself), it is the
existence of vital capital in the possession of another person and the
willingness of that person to part with more or less of it in exchange
for the shoes--it is these two conditions, alone, which prevent the
shoemaker from having consumed his capital unproductively, just as
much as if he had spent his time in chopping up the leather into
minute fragments.
Thus, the examination of the very case selected [180] by the advocate
of the doctrine that labour bestowed upon manufacture, without any
intervention of capital, can produce wages, proves to be a delusion of
the first magnitude; even though it be supported by the dictum of Adam
Smith which is quoted in its favour (p. 34)--
. . . "The produce of labour constitutes the natural recompense
or wages of labour. In that original state of things which
precedes both the appropriation of land and the
accumulation of stock, the whole produce of labour belongs
to the labourer. He has neither landlord nor master to
share with him" ("Wealth of Nations," ch. viii).
But the whole of this passage exhibits the influence of the French
Physiocrats by whom Adam Smith was inspired, at their worst; that is to
say, when they most completely forsook the ground of experience for a
priori speculation. The confident reference to "that original state of
things" is quite in the manner of the Essai sur l'Inegalie. Now, the
state of men before the "appropriation of land" and the "accumulation
of stock" must surely have been that of purely savage hunters. As, by
the supposition, nobody would have possessed land, certainly no man
could have had a landlord; and, if there was no accumulation of stock
in a transferable form, as surely there could be no master, in the
sense of hirer. But hirer and hire (that is, wages) are correlative
terms, like mother and child. As "child" implies "mother," so does
"hire" or "wages" imply a [181] "hirer" or "wage-giver." Therefore,
when a man in "the original state of things" gathered fruit or killed
game for his own sustenance, the fruit or the game could be called his
"wages" only in a figurative sense; as one sees if the term "hire,"
which has a more limited connotation, is substituted for "wage." If
not, it must be assumed that the savage hired himself to get his own
dinner; whereby we are led to the tolerably absurd conclusion that, as
in the "state of nature" he was his own employer, the "master" and the
labourer, in that model age, appropriated the produce in equal shares!
And if this should be not enough, it has already been seen that, in
the hunting state, man is not even an accessory of production of vital
capital; he merely consumes what nature produces.
According to the author of "Progress and Poverty" political economists
have been deluded by a "fallacy which has entangled some of the most
acute minds in a web of their own spinning."
"It is in the use of the term capital in two senses. In the primary
proposition that capital is necessary to the exertion of productive
labour, the term "capital" is understood as including all food,
clothing, shelter, &c.; whereas in the deductions finally drawn from
it, the term is used in its common and legitimate meaning of wealth
devoted, not to the immediate gratification of desire, but to the
procurement of more wealth--of wealth in the hands of employers as
distinguished from labourers" (p. 40).
[182] I am by no means concerned to defend the political economists who
are thus charged with blundering; but I shall be surprised to learn
that any have carried the art of self-entanglement to the degree of
perfection exhibited by this passage. Who has ever imagined that
wealth which, in the hands of an employer, is capital, ceases to be
capital if it is in the hands of a labourer? Suppose a workman to be
paid thirty shillings on Saturday evening for six days' labour, that
thirty shillings comes out of the employer's capital, and receives the
name of "wages" simply because it is exchanged for labour. In the
workman's pocket, as he goes home, it is a part of his capital, in
exactly the same sense as, half an hour before, it was part of the
employer's capital; he is a capitalist just as much as if he were a
Rothschild. Suppose him to be a single man, whose cooking and
household matters are attended to by the people of the house in which
he has a room; then the rent which he pays them out of this capital
is, in part, wages for their labour, and he is, so far, an employer.
If he saves one shilling out of his thirty, he has, to that extent,
added to his capital when the next Saturday comes round. And if he
puts his saved shillings week by week into the Savings Bank, the
difference between him and the most bloated of bankers is simply one
of degree.
At page 42, we are confidently told that [183] "labourers by receiving
wages" cannot lessen "even temporarily" the "capital of the employer,"
while at page 44 it is admitted that in certain cases the capitalist
"pays out capital in wages." One would think that the "paying out" of
capital is hardly possible without at least a "temporary" diminution
of the capital from which payment is made. But "Progress and Poverty"
changes all that by a little verbal legerdemain:--
. . . "For where wages are paid before the object of the labour
is obtained, or is finished--as in agriculture, where
ploughing and sowing must precede by several months the
harvesting of the crop; as in the erection of buildings,
the construction of ships, railroads, canals, &c.--it is
clear that the owners of the capital paid in wages cannot
expect an immediate return, but, as the phrase is, must
"outlay it" or "lie out of it" for a time which sometimes
amounts to many years. And hence, if first principles are
not kept in mind, it is easy to jump to the conclusion
that wages are advanced by capital" (p. 44).
Those who have paid attention to the argument of former parts of this
paper may not be able to understand how, if sound "first principles
are kept in mind," any other conclusion can be reached, whether by
jumping, or by any other mode of logical progression. But the first
principle which our author "keeps in mind" possesses just that amount
of ambiguity which enables him to play hocus-pocus with it. It is
this; that "the creation of value does not depend upon the finishing
of the product" (p. 44).
[184] There is no doubt that, under certain limitations, this
proposition is correct. It is not true that "labour always adds to
capital by its exertion before it takes from capital its wages" (p.
44), but it is true that it may, and often does, produce that effect.
To take one of the examples given, the construction of a ship. The
shaping of the timbers undoubtedly gives them a value (for a
shipbuilder) which they did not possess before. When they are put
together to constitute the framework of the ship, there is a still
further addition of value (for a shipbuilder); and when the outside
planking is added, there is another addition (for a shipbuilder).
Suppose everything else about the hull is finished, except the one
little item of caulking the seams, there is no doubt that it has still
more value for a shipbuilder. But for whom else has it any value,
except perhaps for a fire-wood merchant? What price will any one who
wants a ship--that is to say, something that will carry a cargo from
one port to another--give for the unfinished vessel which would take
water in at every seam and go down in half an hour, if she were
launched? Suppose the shipbuilder's capital to fail before the vessel
is caulked, and that he cannot find another shipbuilder who cares to
buy and finish it, what sort of proportion does the value created by
the labour, for which he has paid out of his capital, stand to that of
his advances?
[185] Surely no one will give him one-tenth of the capital disbursed
in wages, perhaps not so much even as the prime cost of the raw
materials. Therefore, though the assertion that "the creation of
value does not depend on the finishing of the product" may be strictly
true under certain circumstances, it need not be and is not always
true. And, if it is meant to imply or suggest that the creation of
value in a manufactured article does not depend upon the finishing of
that article, a more serious error could hardly be propounded.
Is there not a prodigious difference in the value of an uncaulked and
in that of a finished ship; between the value of a house in which only
the tiles of the roof are wanting and a finished house; between that
of a clock which only lacks the escapement and a finished clock?
As ships, house, and clock, the unfinished articles have no value
whatever--that is to say, no person who wanted to purchase one of
these things, for immediate use, would give a farthing for either. The
only value they can have, apart from that of the materials they
contain, is that which they possess for some one who can finish them,
or for some one who can make use of parts of them for the construction
of other things. A man might buy an unfinished house for the sake of
the bricks; or he might buy an incomplete clock to use the works for
some other piece of machinery.
Thus, though every stage of the labour [186] bestowed on raw material,
for the purpose of giving rise to a certain product, confers some
additional value on that material in the estimation of those who are
engaged in manufacturing that product, the ratio of that accumulated
value, at any stage of the process, to the value of the finished
product is extremely inconstant, and often small; while, to other
persons, the value of the unfinished product may be nothing, or even a
minus quantity. A house-timber merchant, for example, might consider
that wood which had been worked into the ribs of a ship was
spoiled--that is, had less value than it had as a log.
According to "Progress and Poverty," there was, really, no advance of
capital while the great St. Gothard tunnel was cut. Suppose that, as
the Swiss and the Italian halves of the tunnel approached to within
half a kilometre, that half-kilometre had turned out to be composed of
practically impenetrable rock--would anybody have given a centime for
the unfinished tunnel? And if not, how comes it that "the creation of
value does not depend on the finishing of the product"?
I think it may be not too much to say that, of all the political
delusions which are current in this queer world, the very stupidest
are those which assume that labour and capital are necessarily
antagonistic; that all capital is produced by labour and therefore, by
natural right, is the property of [187] the labourer; that the
possessor of capital is a robber who preys on the workman and
appropriates to himself that which he has had no share in producing.
On the contrary, capital and labour are, necessarily, close allies;
capital is never a product of human labour alone; it exists apart from
human labour; it is the necessary antecedent of labour; and it
furnishes the materials on which labour is employed. The only
indispensable form of capital--vital capital--cannot be produced by
human labour. All that man can do is to favour its formation by the
real producers. There is no intrinsic relation between the amount of
labour bestowed on an article and its value in exchange. The claim of
labour to the total result of operations which are rendered possible
only by capital is simply an a priori iniquity.
[188]